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How to Pay for Your Non-Accredited Education

October 27, 2016 | 4:48pm

If you’re considering choosing to attend a non-accredited school, two financial challenges may lay ahead: Not having access to federal student aid (which leads to private student loans) and keeping federal student loans you may have in good standing during school.

Private student loans

Private student loans tend to have less favorable terms and conditions when compared with federal student loans. These loans are also based on credit. However, if you have to borrow through private student loans, there is no reason you cannot do so responsibly.

Consider asking the following questions when choosing a private loan:

What are the credit requirements and is a creditworthy cosigner required? Will I get a lower rate and lower fees with a creditworthy cosigner? When can my cosigner be “released” from any obligation on my loan?

What is my rate, is it fixed or variable (expect the latter), when does it change (if variable), and is there a maximum rate?

How often do you capitalize the interest?

What are my repayment options and are there discounts for paying on time?

What are my postponement options if I pursue another degree, especially one with advanced training such as a residency program?

The Consumer Financial Protection Bureau may be able to help with your decisions about private student loans. They help consumers understand how their loans work before they borrow, including students who borrow private student loans.

Keeping Federal Student Loans in Good Standing

If you have federal student loans borrowed prior to matriculating in your health sciences institution, they will not be eligible for the “in-school deferment” until your school is accredited. However, you still have some options for keeping them in good standing.

You may be eligible for a repayment option called Income Based Repayment (IBR), which is designed to allow borrowers to repay their eligible loans at 15% of their discretionary income. Depending on your program, you may have minimal — if any — income while enrolled, and may have minimal payments during school under IBR, possibly as low as $0.

Should IBR not be an option, consider asking your loan servicer for forbearance. Forbearance is similar to deferment in that it allows borrowers to postpone payments while protecting their credit, but eligibility may be more flexible. Interest does accrue during forbearance, but that is better than becoming delinquent on your student loans.

The main point is that the same approaches to paying for college apply, no matter if your program is accredited or non-accredited: ask for help, take the time to investigate your options and remember to budget wisely and borrow responsibly.

Thanks to Paul S. Garrard, President and Founder of PGPresents, LLC and a 27-year veteran of student financial aid and higher education, for serving as a source for this article.

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Comment:

My son is 18 and a recent high school graduate. He wants to attend the San Francisco Cooking School professional 6-month course.. I am retired and have no collateral or the ability to co-sign for him. Is there any means of him getting the funding to attend the school?

Hi Paul, we’d suggest speaking to an admissions counselor or the financial aid office at your college of choice to learn about all of your funding options as they vary. If you’re in high school, one of your school’s counselor will be able to provide you with guidance as you consider funding your education. Best of luck!

My son wants to go to ferrier school and also equine dentistry school. However I can’t help him and he can’t borrow the money because of massive medical bills that has lowered his credit to a “fair” rating. Both of these schools are not accredited Are there grants available?

Hi Rhonda, that’s great about your son’s heath care career ambitions! Has he chosen a specific school yet? If so, we’d suggest reaching out to the financial aid office to see what sorts of opportunities are available.